Labour playing catch-up on multi-national tax

The Labour Party is trying to play catch-up on multi-national tax, National Party Campaign Chair Steven Joyce says.

“The Government announced it will collect an initial $100 million a year in additional multi-national tax in the budget two months ago, and the Labour Party turns up today and announces they plan to collect an additional $200 million a year without any plan as to how to get there,” Mr Joyce says.

“We are currently wrapping up consultation on three separate areas of work to ensure multi-nationals pay their share of tax for their activities in New Zealand.

“These areas cover companies that use artificially high interest payments to shift profits offshore, companies that artificially avoid having a taxable presence in New Zealand, and companies that exploit hybrid mismatches between different countries tax rules.

"These match the recommendations of the OECD working group on multinational tax. Officials aren’t recommending a diverted profits tax in New Zealand because it is unlikely to be effective.

“On top of that, New Zealand joined the new OECD multi-lateral Convention to prevent base erosion and profit shifting by multi-national companies when Judith Collins signed it in Paris recently. That updates several thousand tax treaties between OECD countries including New Zealand in just one go.

"It is these practical steps that will make the difference, not writing to companies telling them that you'd like them to pay their share of tax.

“The Government has a detailed plan currently being implemented on multi-national tax avoidance to ensure that all companies operating in New Zealand pay their fair share in tax. Labour are simply playing ‘me too’,” Mr Joyce says